Regulatory Alerts2021-04-06
Added · Updated
Instructions for Banks’ Owning of Stocks and Capital Shares in Companies No. (5/2021)
The Central Bank of Jordan issues Instructions No. (5/2021) prohibiting banks from owning non-financial subsidiaries and restricting ownership stakes in non-financial companies to 10%, with a potential increase to 20% for specific supportive activities. The directive mandates prior written Central Bank consent for establishing subsidiaries, owning shares in deposit-taking institutions, or acquiring insurance companies, while capping total stock ownership at 50% of the bank's subscribed capital. Banks must submit quarterly reporting statements via the off-site supervision system starting from the first quarter of 2021 and dispose of shares acquired through debt repayment within two years. These instructions repeal previous circulars and instructions regarding bank ownership and take effect immediately upon issuance.